Congressional Bank

Paycheck Protection Loan Forgiveness (as of 1/12/21)

January 12, 2021 UPDATE: Congressional plans on processing Second Draw PPP loans. For more information, please visit our PPP Hub.

All of the forgiveness information below is subject to change based on the new stimulus bill, but is left up for reference as it is the best information currently available.

Congressional Bank has developed an online portal to accept forgiveness applications, similar to how applications for PPP loans were accepted. Instructions for how to access the portal are here. Please do not fill out any forgiveness application forms in advance of applying, our system will complete them for you once our team has reviewed your submitted numbers.

Only users who signed the PPP note will initially be given access to the forgiveness portal. If you need additional users to have access, please email CARES@congressionalbank.com.

Congressional Bank’s forgiveness process works as follows:

  1. Borrower begins the forgiveness process by following the instructions above.
  2. Borrower enters employee, expense and other relevant forgiveness information into Congressional Bank’s online portal. Please review below for required documents.
  3. The Congressional Bank team reviews the numbers and supporting documentation provided and requests any additional information from the borrower.
  4. The Congressional Bank team generates a filled-out PDF forgiveness application that the Borrower prints out, signs, and then uploads back to the forgiveness portal.
  5. The Congressional Bank does one final review and then submits to the SBA.
  6. Congressional Bank notifies the borrower as to the final outcome of the SBA review.

Per SBA regulations, banks have 60 days to review forgiveness requests and the SBA then has 90 additional days to provide a final decision. Borrowers will be notified of progress as their application moves through different stages.

If you have questions on how to provide the data required for a PPP forgiveness application, please see the FAQs listed below.

Common PPP Forgiveness Questions

Where Can I Find the Forgiveness Application forms?
  • Congressional’s PPP Forgiveness Portal will fill out the required form for you so you should not fill out the form prior to starting the forgiveness process, but if you would like to see the forms for what questions you will be asked, see below
  • The SBA has 3 different types of forgiveness applications:
    • Form 3508S, which is to be used for all PPP loans $50,000 and below. Instructions for this form are here.
    • Form 3508EZ, which can be used by borrowers who have not reduced salaries / hourly wages by more than 25% for any employee, and either did not reduce headcount during the forgiveness period OR certify they are unable to operate during the forgiveness period at the same level of business activity as before February 15, 2020 due to safety / health restrictions or guidance related to COVID-19. Instructions for this form are here.
    • Form 3508, which is to be used for all PPP borrowers who do not meet the criteria for Form 3508S or Form 3508EZ. Instructions for this form are here.
What Supporting Documentation Will Congressional Bank Require for My PPP Forgiveness Application?

Per SBA regulations, we are required to collect documentation supporting all payroll and non-payroll costs listed on the PPP forgiveness application. Per SBA guidance, see below for the supporting detail that is needed. Note that the guidance below is applicable to non-Schedule C filers, if you are an independent contractor or sole proprietor, please see the applicable FAQ that follows.

For payroll expenses, borrowers should provide EACH of the following:

  • Third party payroll service provider reports documenting the amount of cash compensation paid to employees (this should be by employee for the Covered Period). Many payroll providers have PPP reports that can be generated automatically.
  • Tax forms (or equivalent third-party payroll service provider reports) for periods that overlap with the Covered Period or Alternative Covered Period including BOTH form 941s and unemployment insurance / wage contribution reports.
  • Payment receipts, cancelled checks or account statements documenting any employer contributions to employee health insurance and retirement plans

For mortgage interest, borrowers should provide EACH of the following:

  • Lender account statements from February 2020
  • Lender account statements from the months of the Covered Period through one month after the end of the Covered Period

For business rent or lease expenses, borrowers should provide EACH of the following:

  • Copy of current lease agreement or lessor account statements from February 2020
  • Lessor account statements from the months of the Covered Period through one month after the end of the Covered Period

For utility expenses, borrowers should provide EACH of the following:

  • Copy of invoice paid for February 2020
  • Copy of invoices paid during the Covered Period
For Independent Contractors (and Other PPP Borrowers Who Used a 2019 Schedule C for PPP Loan Amount) Without True “Payroll”, How Do I Provide Supporting Payroll Documentation?

If you applied for a PPP loan from Congressional using your 2019 Schedule C, this document by itself can provide support for payroll forgiveness. You are eligible for forgiveness up to 2.5/12 of your 2019 Schedule C net profit (line 31). Please provide your 2019 Schedule C in the forgiveness support upload (even though you provided it during the application process) as the SBA requires us to confirm we have the most current version on file.

What is the Deadline to Submit a Forgiveness Application?

You can apply for forgiveness up until the maturity of the loan. However, payments on your loan will commence 10 months after the Covered Period ends, so many borrowers are choosing to apply for forgiveness in advance of that.

Are There Resources Available to Help Borrowers Understand and Complete the Application Forms?
  • The SBA’s rules on forgiveness guidelines and requirements are here.
  • The SBA has released an FAQ with answers to common questions on the forgiveness process here.
  • The American Institute of CPAs has a page of FAQs (here) for PPP loans, which can provide help for borrowers in answering forgiveness questions.
  • You can always email CARES@congressionalbank.com for help, but if you’d prefer to talk to an individual advisor about a complex situation, you can receive guidance on your PPP loan forgiveness application from Upside Financial, who has experience in navigating PPP and the forgiveness process. Upside Financial charges a fee for its services. To find out how to get started, visit upsidefinancial.com/congressional.
    • Please note that this link will take you away from the Congressional Bank website. Congressional Bank is not affiliated with nor financially compensated by Upside Financial.
When Does My Covered Period Begin, and How Long Does It Last?

The Covered Period begins on the date Congressional Bank deposited PPP proceeds into your account. Borrowers may also choose an Alternative Covered Period that begins the first day of the borrower’s pay period following their loan disbursement date. Note that this Alternative Covered Period only applies to payroll costs, and all nonpayroll costs must use the standard Covered period.

Borrowers who received funds prior to June 5, 2020 can elect an 8-week or 24-week period, while borrowers receiving funds on or after June 5, 2020 will have a 24-week covered period.

What Costs Are Eligible for Forgiveness?

Expenses eligible for forgiveness include payroll costs and healthcare benefits, plus payments for mortgage interest, rent, utilities and interest on debt incurred prior to February 15, 2020. Prepaid expenses that are not incurred during the forgiveness period (such as paying rent in advance) are not eligible for forgiveness. Payroll costs must account for at least 60% of the expenses listed as forgiveness-eligible on the application or the forgiveness amount will be proportionally reduced.

Payroll costs can include all forms of cash compensation paid to employees, including employer-paid healthcare expenses, employer retirement contributions, tips, commissions, bonuses and hazard pay. The forgivable cash compensation per employee is capped at $100,000 on an annualized basis.

Generally speaking, costs incurred prior to the Covered Period but paid during the Covered Period, or incurred during the Covered Period and paid after the Covered Period, can be included as forgivable expenses if they were paid on or before the next regular payroll or billing period.

When Can I Apply for Forgiveness?

A borrower can submit a forgiveness request at any point up until the loan maturity, however payments on the loan will begin 10 months after the covered period ends.

A borrower may submit a forgiveness request before the end of the covered period but must consider the full effect of any salary / wage decreases as if the full covered period had elapsed.

What Happens If I Also Received an EIDL Advance?

As of January 2021, an EIDL Advance no longer reduces PPP forgiveness eligibility.

When Are Payments Due on My PPP Loan?

Regardless of what your loan document may say, Congressional plans on following current SBA guidance, which says that as long as a borrower submits a loan forgiveness application within 10 months of the completion of the Covered Period, the borrower is not required to make any payments until the forgiven amount is submitted to the lender by the SBA.

If, at that point, there is still a remaining loan balance, regular payments will begin on a schedule provided to you by Congressional at that time.

I Cannot Operate Normally Due to COVID-19 Restrictions, What Can I Do?

Per SBA guidance, borrowers can certify that they cannot operate normally and will not be penalized for having lower average FTEs than the reference period. Payroll costs must still be incurred and total at least 60% of the forgiveness amount to not be reduced by the 60% payroll restriction, but the inability to fully staff a business will not reduce forgiveness.